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The Fed: Recession? What recession?

"Jumbo shrimp" and "military intelligence" now have a new competitor in the battle for America's favorite oxymoron. It's "jobless recovery."

The Federal Reserve has crafted this artful term to describe an economic condition where banks are again doing fine and bonuses are flowing, but most everyone else is still in the tank. Indeed President Barack Obama is so enamored of the phrase that he has nominated Fed Chairman Ben Bernanke to serve another four years. Mr. Bernanke, you'll recall, was the visionary who recently fiddled while our national banking structure geared up to burn down.

The Fed's elitist view of economic life recently reverberated through Jackson Hole, Wyo., that playground of the prosperous where the world's central bankers held their annual fun-filled convention. Maybe they should have gathered in Detroit. It's hard from Jackson Hole to discern soup kitchens, unemployment lines, or tearful evictions, but our leaders were nonetheless able to spot modest increases in home sales, bank profits, productivity, and stock prices. These are what count if you're a central banker.

But hidden behind the Grand Tetons' snowy peaks were growing layoffs, sagging wages, record mortgage delinquencies, overwhelmed food banks, spreading homelessness and 42 states losing jobs in August. These statistics amount to mere asterisks on Wall Street's chart of blessed economic improvement. Apparently that chart finds nothing terribly significant in the fact that California is suffering its worst unemployment in 70 years.

The Fed is not the only agent of society eager to tout our phantom recovery. The press is all over it too. Radio, TV and newspapers alike happily quote glowing pundits who opine that the worst is over. Not surprisingly these media seers all enjoy major advertising revenue from the financial industry, which in turn makes its living off (foolishly) hopeful investors.

Obviously there's no profit in reporting economic tragedy. That's why The New York Times ferreted out for a front page article a Wisconsin factory that has rehired a dozen workers. A litany of current layoffs would be less encouraging for investors.

This defining of the nation's economic welfare by taking Wall Street's temperature also has an impact on Congress. Plainly it's not the unemployed who stuff congressional campaign coffers. It's bankers, brokers and bigwigs. Alert to this fountain of political lifeblood, pols have been slow to re-impose those Rooseveltian banking regulations that had previously helped keep us out of today's kind of mess. Some were repealed not so long before the onset of this recession. False belief that the economy is actually recovering reduces citizen demand for those regulations' return.

But actual victims of the recession are not so easily fooled. The 14.5 million who have already lost jobs are joined by a few hundred thousand new colleagues each month. Meanwhile the expiration of unemployment compensation looms for 1.3 million at the end of the year. All this with no employment upturn in sight. And as we know from the recent health care ruckus, folks who lose their jobs often lose their access to insurance as well.

Luckily, Sen. Chris Dodd, D-Conn., facing a stiff re-election fight, is aiming his Banking Committee toward serious regulatory reforms. Even the president is nervous about that much tough medicine, let alone Dodd's Connecticut banking buddies. It may be that his fear of losing his Senate seat will trump Bernanke's arguments that the world is just fine. Maybe, just maybe, something useful will get done. Still, it would be better if we got rid of both Dodd and Bernanke and imposed some real reformers on Wall Street.

Columnist William A. Collins is a former state representative and a former mayor of Norwalk, Conn.